Personal Retirement Scheme (PRS)

The Personal Retirement Scheme (PRS) is managed by Insurance Company of East Africa Limited (ICEA). The Scheme was started in 1994 following Income Tax amendments allowing individuals to establish their own pension plans. It is registered by both Kenya Revenue Authority and Retirement Benefits Authority thereby enabling a contributor to enjoy tax relief.

Key Features of the PRS

Contributions:

May be paid periodically in the form of fixed, level or percentage of salary.
Enjoy tax-free limit of KShs.20,000* per month, (Less contributions to the NSSF).

NB: Amounts in excess of KShs.20,000 per month (KShs.240,000.00 per annum) are allowed subject to the following:-

Employer’s excess contribution (if any) will not be allowable for purpose of corporation tax.
Employee’s excess contribution will not be deductible for PAYE tax purpose.
Corporation tax is payable on investment income earned by those excess contributions.
Tax is not chargeable on benefits paid.
Are limited to minimum of KShs.2,000 per month. This requirement is waived for a related group of members. Any contribution exceeding the tax-exemption limit is invested separately, in a taxable fund.
Are flexible i.e. may be paid monthly, quarterly, half-yearly or yearly as suits your requirements. You may change the mode of contribution at any time subject to the minimum contribution level.
Single lump-sum contributions are allowed.
Transfers from other registered funds are also allowed subject to the existing tax status.
May be escalated to keep up with inflation. The rate of escalation may be advised at the outset or at the time it is to take effect.

Retirement Age:

Early: 50 years - Termination before this age is treated as a withdrawal.
Normal: 60 years.
Late: 65 years

Retirement Benefit:

Is a fund accumulated over the lifetime of the scheme and will be utilized to purchase a pension or pay lump sum at retirement by Insurance Company of East Africa Limited (ICEA). The minimum period during which the pension is paid may be ten years.

Withdrawal before retirement.

On withdrawal before retirement the full amount accumulated is payable to the member after a 3 months’ notice period. Members for whom employers make contributions are not allowed to withdraw whilst still in employment.

A member cannot access employer’s contributions till attainment of the retirement age, UNLESS the member is:

Emigrating from Kenya permanently with no intentions of coming back.
Ill below and cannot continue with own occupation.
Permanently and totally disabled.

PRS LIFE COVER

This is the cover favorably priced to make it very easy to afford. It is provided in two levels:

Classic Saver Life Cover

This is for ICEA Personal Retirement scheme members who fall in the following categories:
Belong to a Group PRS with membership less than 6 individuals.
Individual PRS clients who do not belong to any group.

Super Saver Life cover

This is for ICEA PRS members who belong to groups with a membership of 6 or more individuals.

Benefits of this cover are:

Lumpsum death benefit.
Funeral expense benefit.
Disability benefit.
No medical underwriting.